Eco Innovator November 2011
Listed Companies Raise Millions
By Victor Bivell
Month after month the ASX continues to show that it is the outstanding venture capital market in Australia. In the two months over September and October, 14 young and emerging cleantech companies were able to raise a total of $29.3 million.
This was through a combination of placements, rights issues, share purchase plans and one initial public offering.
Considering the volatility of the stock market over this period and the conservative approach of many investors, the result is outstanding, and shows that at least one of Australia's three venture capital markets is working and working well.
RedFlow, which is commercializing batteries that store solar energy, completed the second tranche of the share placement announced on 17 August when it issued 12 million shares at $1 each to sophisticated and professional investors.
RedFlow raised $842,000 through its share purchase plan and said it was supported by a large number of shareholders. The issue price was $1, the same as for the August placement.
The $12.8 million proceeds of the placement and share purchase plan will accelerate the introduction of the large scale outsourced manufacture of the company's core zinc-bromine battery modules (ZBM), support product roll-out in selected markets, and for working capital.
The placement was managed by RBS Morgans Corporate and Ord Minnett and the share purchase plan by RBS Morgans Corporate.
Energy efficiency company Energy Action listed through an oversubscribed IPO that raised $3.8 million. See separate story this issue for details.
West Australia based waste to energy developer AnaeCo placed $2.5 million worth of shares at 5 cents each, the first part of a planned $5 million capital raising. The remaining $2.5 million will be raised through a shareholder share purchase plan with shareholders able to purchase up to $15,000 worth of shares each.
Funds from the capital raising will be used for working capital during the expansion of the company's DiCOM Project in Perth, as well as for industrialization of the DiCOM technology, business development costs and repayment of a short-term loan facility.
Firm commitments for 50 million shares have been received from sophisticated and professional investors. About $1.5 million of the capital subscribed came from parties related to directors. The capital raising is managed by Bizzell Capital Partners.
AnaeCo chief executive, Patrick Kedemos, said given the difficult market conditions "We welcome the support shown by investors in AnaeCo, and I re-affirm our commitment to deliver the focus on commercialization."
South Australian geothermal explorer Petratherm raised $2.75 million. $2.29 million through a placement in August and $458,500 through a share purchase plan at 12.5 cents per share through September and October.
Chairman Derek Carter said the amount was very encouraging considering the challenging market conditions. The closing date for the share purchase plan was extended several times, and during the offer the company's share price fell below the offer price.
The money raised is funding working capital and exploration and development of the company's projects, in particular its flagship Paralana Project in South Australia.
The placement was managed by Patersons Securities.
Sustainable timber flooring company Style undertook a rights issue that was underwritten by Peregrine Corporate Ltd for up to $2,087,000.
The rights issue was priced at 0.3 cents per share, and closed on 12 October with the company receiving acceptances for $544,652, equivalent to 181.5 million shares and 90.7 million free options. The underwriter took up the shortfall of 514.3 million shares and 257.1 million free options amounting to $1,543,005.
Three Style directors participated in the rights issue. Peter Torreele directly and indirectly acquired 13.1 million shares and 6.55 million options for $38,416; Charles Gullotta indirectly acquired 10.5 million shares and 5.25 million options for $31,550; and Andrew Nuland picked up 6 million shares and 3 million options for $18,000.
The options under the issue expire on 30 August 2014 and have an exercise price of 0.5 cents each.
Peregrine was paid a fee of 5 per cent of the total sought to be raised under the issue, and received 50 million options with the same terms as the free-attaching options.
The funds are mainly for working capital, marketing support for the launch of Style's patented strand woven eucalyptus flooring products and further investment in research and development to enable international licenced manufacturing.
Tasmanian based geothermal explorer KUTh Energy raised $1.85 million through a rights issue to shareholders. It received acceptances for $579,142, and the shortfall of $1,296,273 was taken up by the underwriter, Veritas Securities Ltd.
The proceeds are for working capital. This includes minor exploration and regulatory works to facilitate the next stage of development at the company's geothermal projects in Tasmania, Queensland and Vanuatu.
Air and water engineering company Clean TeQ Holdings raised $1 million through a pro-rata entitlement offer to shareholders that was underwritten by Wasabi Energy. The offer price was 3.7 cents per share.
Clean TeQ received acceptances for 67.1 per cent of the shares on offer totaling $679,736. The shortfall of 32.9 per cent was taken up by Wasabi Energy, which now holds 8.5 per cent of Clean TeQ. Wasabi's subsidiary Aqua Guardian holds another 17.5 per cent.
Clean TeQ is commercializing air and water purification and metals recovery technologies.
Geothermal energy explorer Torrens Energy raised $955,000 at 4.5 cents per share. A 1 for 3 Entitlement Issue raised $594,000 before costs. The take-up by shareholders was for 13 million shares or 62 per cent of what was offered, which Torrens said was strong support. The shortfall of 8,019,424 shares was later placed, raising another $361,000.
The raising, underwritten by Cygnet Capital Pty Ltd, was for maintenance of the company's geothermal projects, the identification and review of potential resource opportunities, costs of the offer, and working capital.
Fellow geothermal hopeful Hot Rock raised $785,000 by placing 31.5 million shares at 2.5 cents each. The funding is for ongoing exploration and evaluation of the company's geothermal projects.
Managing director Mark Elliott said the level of support received had been pleasing given the current challenging market environment.
"The outlook for geothermal energy is strong and the funds raised will enable the company to continue to progress its portfolio of projects towards development. HRL is the largest holder of granted volcanic geothermal projects in Chile and Peru. All tenements are 100 per cent owned, providing the opportunity for favourable farm-out terms to fund future exploration and development costs to fast track projects," he said.
$500,000 worth of shares will be placed and issued without shareholder approval with the balance of $30,000 worth subject to shareholder approval. $255,000 worth of shares will be offered to directors or entities related to directors of Hot Rock, subject to shareholder approval.
$250,000 of the capital raising was undertaken by Intersuisse Ltd and its associate company Phillip Capital Pty Ltd.
In September emerging green energy utility, Enerji, raised $409,000 through a placement to sophisticated and private investors. This comprised 20,950,000 shares at 2 cents each and 10,475,000 listed options with an exercise price of 3 cents and expiring 30 June 2015.
Also in September Enerji raised another $80,000 with the placements of shares and options. One $20,00 tranche was to a private investor through the issue of 1 million shares at 2 cents each and 0.5 million free listed options with an exercise price of 3 cents expiring 30 June 2015.
The capital is to help fund the installation of Australia's first Opcon Powerbox at Horizon Power's Carnarvon Power Station in WA.
The Opcon Powerbox is a waste heat recovery system that can produce up to 20 per cent more power and lower CO2 emissions by 15 per cent without burning additional fuel. Enerji's main target market is off-grid power stations that supply electricity to remote mine sites.
Solar tower hopeful EnviroMission has raised $215,000 in two tranches of $165,00 in September and $50,00 in October. The raisings were at 3 cents per share and for working capital.
In mid September EcoQuest, which is commercializing a biodegradable nappy, raised $100,000 through a placement of 3,333,333 shares at 3 cents each to sophisticated investors. The capital was for the production of stock and for working capital.
However, the company's share price has continued to fall this year, and in mid October Eco Quest raised another $100,902, but at the much reduced price of 0.67 cents per share.
The board said it recognizes that the business operations have not generated the sales which had been expected, and it has decided to contract operations to reduce its cash burn.
Accordingly, Keith Herbert resigned as managing director and other roles are being eliminated or combined. The board has commissioned an independent review of the business, and is considering the acquisition of a complementary business.
Mr Darren Onley-Faser has been appointed as acting managing director pending the outcome of the review. Over the next three months he and the board will look at repositioning and recapitalizing the company .
Mr Onley-Faser is a company director and former corporate lawyer with mergers and acquisitions experience. He is a director Australian Public Trustees, Mariner Corporation Ltd and Stanfield Funds Management Ltd. A fee of $75,000 will be paid to Mariner Corporation for his services over the three month period. The fee will be paid by way of shares at 0.67 cents each.
Energy management company Intermoco closed a share purchase plan with acceptances for $191,000. All five directors participated for a total of $55,000 shares. Intermoco installs energy management systems into buildings.
Environmental engineer Aeris Environmental raised $120,00 when a convertible noteholder elected to convert 600,000 convertible notes at 20 cents per share into 600,000 shares. The convertible notes were part of a July 2009 private placement of 12.5 million convertible notes.
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